(PBYI) Shares Soar 288%, Call Options Zoom 2671%/ Profit Alert

ByCatherine action, alert, blue, company, current, finance, market, PBYI, profit, profit-alert, shares Comments Off

MomentumOptionsTrading.com Midday Update for 7/23/2014

Puma Biotechnology (PBYI) Shares Soar 288%, Call Options Zoom 2,671%/ Profit Alert (QQQ)!!!

1:00pm (EST)

If you want to know why I trade options you will find no better reason than what I am about to show you. The hunt for the ultimate option trade is always on and I was fortunate enough to find an 800% return winner on Galena Biopharma (GALE, $2.99, up $0.09) earlier this year. Shares made a run to $7.77 back in January and the call options I recommended exploded on the move.

Biotech stocks can provide the fattest option returns based on clinical drug trials, good or bad, as medicines move through Phase I, II, and III stages. Doing research, chart work and knowing what are in the pipelines are the 3 main factors in finding a possible gem.

Shares of Puma Biotechnology (PBYI, $229.32, up $170.29) are zooming over nearly 300% after the company announcing phase 3 trials for a breast cancer drug were met.

The call options have always commanded a premium as shares had traded in a prior 52-week range of $33-$143. Needless to say, today’s move has shattered the prior peaks.

The August 65 calls (PBYI140816C00065000, $163.50, up $157.60) closed Tuesday’s session at $5.90 and have gone parabolic as you can see from the Yahoo Finance Quote below:

These options are currently up 2,671% and have traded to a high of $167.80. This means a 10-contract trade, or $5,900, invested before yesterday’s close would be worth a jaw-dropping $163,500 at current levels. A 1-contract trade, or $590, would be worth $16,350.

Of course, this wasn’t an official trade and if it was I would’ve taken the day off, but my point is that these golden nuggets are out there and they can be found. It’s also one of the reasons why biotech is my favorite sectors to research.

Unfortunately, Puma was not on my Watch List.

There are several active trades in the Weekly Wrap on other biotech stocks and there will be more to come but I missed a beauty. Of course, the drug still faces hurdles but this will be a story to watch going forward.

As far as the market, the action has been mixed with the blue-chips lagging but the bulls are still pushing higher highs and fresh all-time highs.

Heading into the second half of trading, the Dow is down 43 points to 17,070 while the S&P 500 is up 2 points to 1,985. The Nasdaq is gaining 11 points to 4,467 and the Russell 2000 is higher by 3 points to 1,159.

Subscribers, check the Members Area for the current updates as I have a Profit Alert and action to take on another trade.

Author

Catherine